With a thirst for fine wine and high-end spirits, crypto traders diversify their portfolios with liquor NFTs

During turbulent times, Wall Street traders have turned into to the bottle—but not to drink.

Investors have begun looking into alternative assets amidst this bleak economy, and alcohol has always been a staple with consistent demand and prices dictated by its limited supply and scarcity. In fact, wine and high spirits have outperformed gold and the S&P 500, proving to be recession-proof after weathering through all macroeconomic events.

More people are drinking far more than ever before, driving the demand for diverse and innovative beverages. Whisky has been a core investment for a select group for a longest time, while a newfound appreciation for wine and quality spirits has also pumped up prices.

Consumers have elevated their cocktail game as they experiment as mixologists in their own homes, hyping up the demand for super-premium alcohol. Sales of high-end spirits increased by 47 per cent in 2021, doubling the average rate of 18 per cent from the last five years. Historically consumers favoured the so-called brown spirits like whisky and bourbon for investment; nowadays investors are putting their money into white spirits such as vodka, tequila, and gin. The global premium spirit market size is valued to be US$235.7 billion by 2027, with an impressive compound annual growth rate (CAGR) of 10.3 per cent during the forecast period.

Old School Meets New Money

Wine and spirit NFTs are the new thing among crypto traders. While you cannot digitise liquids per se, you can digitise the documentation of its authenticity on the blockchain. One digital marketplace is doing just that, and is offering direct-to-consumer liquor through NFTs.

BlockBar is a platform that sells liquor from luxury brands as digital assets including Hennessy, Ardbeg, The Dalmore, Johnnie Walker, Rémy Martin, and Penfolds. As the original creator, brands mint their own NFTs using BlockBar’s proprietary smart contract to prove its authenticity. Each NFT corresponds to an actual physical bottle, exclusive to BlockBar, and is available to purchase with Ethereum (ETH) and new options recently launched, through credit card or wire transfer. Owners can resell, collect, gift or at any point ‘burn’ their NFT in exchange for the physical bottle, shipped globally from their state-of-the-art storage facility in Singapore.

The number of wine and spirit collectors grew by 582 per cent in the last ten years, yet there is still no way to prove authenticity or ownership. BlockBar aims to eliminate fake bottles in the trade and create a level playing field for new and experienced collectors while democratising the traditional fine wine and spirits industry. “We began exploring the world of NFTs and became instantly hooked. We saw a lot of brands were diving into the NFT space and so we wanted to find a role for NFTs to solve a real problem within the wine and spirits industry—transparency, authenticity, quality assurance, and storage” explains Dov Falic, co-founder & CEO of BlockBar.

 

As wine and spirits investments have always catered to the older crowd, the crypto and NFT space have opened up opportunities to young adults who own a higher disposable income and enjoy savouring luxury wine and spirits across the globe. Currently, the majority of BlockBar’s audience are digital-savvy 25- to 34-year-olds who are looking to diversify their investment portfolio with luxury assets and super-premium spirits. The old route would have required buyers to purchase from retailers at inflated prices or to acquire bottles through an auction house, which may not necessarily be the most accessible for today’s young consumers. “We saw an opportunity for a wider global demographic to have access to the collecting and gifting of fine wine and spirits, which before NFTs would not be possible,” shares Falic.

Through BlockBar, a crypto community club secured Maison Hennessy's first-ever NFT drop at 66.49 ETH (then worth US$226,450), fractionalising its ownership. Another hyped launch within the community granted ten Bored Ape Yacht Club (BAYC) holders to have their own Bored Apes stamped on a hundred Monkey Shoulder bottles, earning royalties from subsequent bottle sales.

Keys to the Distillery

As each NFT is backed by the actual physical bottle, the owner can redeem the digital NFT anytime for the physical one. Millennial consumers not only care about what goes into their product but also the branding and the experience that comes with it. Exclusive to BlockBar, its NFTs come with perks including private distillery tours, private content, access to future drops, and more. Owners of the previous Hennessy·8 collection have access to the Maison’s estate in Cognac, France. “Some of our bottle releases have an extra utility such as NFT artworks and money can’t buy experiences. We’ve hosted a VIP experience at the Highland Distillery for the first ten buyers of The Dalmore 33-Year-Old drop and a Monkey Shoulder party in Miami later this year for all holders of Monkey Shoulder BAYC release,” says Falic.

Not a get-rich-quick scheme, the BlockBar experience is meant to be enjoyed and savoured like a glass of aged whisky, together with other whisky lovers. “Buy something you like and will look forward to enjoying some time in the future,” Falic advises. “We’re creating a thriving global community at BlockBar that we’re excited to see grow in the future. Our community actively engages through our digital channels from Twitter to Discord, enjoy early access and special perks on NFT drops, as well as exclusive invitations,” even hinting at a global BlockBar House in the near future.

After a sold-out music collaboration featuring Usher and Rémy Martin, Falic teases: “Our next big collaborations will be dropping in September and October, but our lips are sealed for now!”

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